Bethlehem Steel Forms New Unit

Portions Of Local Plant May Close

In the second major reorganization in as many days, Bethlehem Steel Corp. yesterday tied its Bethlehem and Steelton, Dauphin County, plants together in a newly formed business unit.

The move demonstrates the company's commitment to the structural shapes business and the Bethlehem plant, a spokesman said. But it also reinforces the possibility that a major portion of the Bethlehem plant will be closed.

In the toughest language used on the subject to date, the company spokesman saidthe "landlocked position of the (Bethlehem) plant and the costly plant layout are serious handicaps" to continuing to make steel from scratch at Bethlehem.

Bethlehem Steel has said it is considering shutting down the "hot end" of the local plant to cut losses. Chunks of steel presumably then would be brought from other plants for rolling into shape at Bethlehem.

There has been no firm decision, according to a spokesman, and the shutdown is only one alternative under consideration.

About 1,000 people work in primary steelmaking at Bethlehem, the company says.

Steelton, which has more modern steelmaking processes and equipment, already is supplying 6,000 tons of semifinished steel a month to the Bethlehem plant. The spokesman said it is too soon to tell whether the steel shipments will increase now that the two plants are linked.

The newly formed Shape and Rail Products Division will include most of the Bethlehem plant, which makes structural shapes like I-beams, and the railmaking facilities at Steelton. The rest of the Bethlehem plant, primarily producing forgings, was formed Monday into an independent unit called the BethForge Division.

An outsider, Robert N. Gurnitz, has been hired as president of the Shape and Rail Products Division. Gurnitz, who holds a doctorate in engineering from the Massachusetts Institute of Technology, had been head of Rockwell International's on-highway axle division.

No major changes in employment are expected as a result. The division will employ about 7,000, the spokesman said.

The commitment to the Bethlehem plant that the move demonstrates was explained by Edward H. Kottcamp Jr., senior vice president. Kottcamp said staying in the structural shape business and taking steps to make the Bethlehem plant competitive with mini-mills and specialty producers fits into the company's long-range strategic plan.

David Blackwell, general manager of the Bethlehem plant, now will report to Gurnitz. Also, subordinates of Gurnitz will be James W. Gustafson, manager of the Steelton plant, and George E. Trainor, general manager of sales and marketing for the steel group.

With the formation of the latest business unit, the only Bethlehem Steel Corp. facilities not in a business unit are the Sparrows Point, Md., and Burns Harbor, Ind., plants. There are no plans to form a business unit to cover the sheet and plate products made at those plants, the spokesman said.

Kottcamp said further announcement of "details of the physical changes that will take place" will be made in the future. The spokesman said no shutdowns of specific facilities are planned, but "the future depends on being competitive."

Ed O'Brien, chief spokesman for the union locals at the Bethlehem plant, could not be reached yesterday for comment.